Infection with hepatitis B virus (HBV) is a major cause of liver disease worldwide and affects more than 1 million people in the United States. Hepatitis induced by hepatitis B virus infection is a complex and intricate process involving interactions of multiple host factors with the virus and/or the viral gene products. The HBV X (HBV) gene plays a crucial role in the life cycle and oncogenic potential of HBV. Since virus-host interactions are central to the pathogenesis of viral infection and host injury, this project aims to elucidate the cellular and molecular mechanisms of HBX-host interactions during HBV infection. Using the yeast two-hybrid system we identified that HBX interacts with two subunits of the 26S proteasome (PSMA7 and PSMC1). The 26S proteasome complex is the predominant cellular factor which degrades cellular proteins in both ubiquitin-dependent and -independent pathways. It has been implicated in the regulation of a variety of transcriptional and cell cycle factors, cellular stress response, and antigen presentation. We further demonstrated an association in vivo of HBX with the 26S proteasome complex. HBX interacts with the proteasome subunits through a mutually competitive structural relationship. The crucial HBX sequences involved in interaction with PSMA7 and PSMC1 were important for its function as a transcriptional coactivator. Expression of HBX in HepG2 cells caused a modest decrease in the proteasome's chymotrypsin- and trypsin-like activities and in hydrolysis of ubiquitinated lysozyme, suggesting that HBX functions as an inhibitor of proteasome. In these cells, HBX is degraded with a half-life of 30 min. Proteasome inhibitors retarded this rapid degradation and caused a marked increase in the level of HBX and an accumulation of HBX in polyubiquitinated form. Thus, the low intracellular level of HBX is due to rapid proteolysis by the ubiquitin-proteasome pathway. To further study the biological function of HBV, we systematically introduced single amino acid substitutions into the X gene of an infectious WHV clone, and study the biological effects of these X mutants in the woodchuck model. These mutations were targeted to X sequences that have been shown to be important for interaction with the proteasome. In vitro transfection studies demonstrated variable diminutions of the transactivation and replication activities of these mutants. Many of the mutants were transactivation negative but none of them were completely replication defective. In parallel, the infectious abilities of these mutant genomes were studied by direct intrahepatic inoculation of DNA into adult woodchucks. All the wild-type transfected animals became infected, whereas, surprisingly, one of three X-minus transfected animals demonstrated evidence of infection with anti-HBc and anti-HBs seroconversion. The other X mutants were also infectious but only in a fraction of the inoculated animals. The inhibition of proteasome function by HBX may account for the multiple actions of HBX and may be an important feature of HBV infection, possibly in helping stabilize viral gene products and suppressing antigen presentation. With our collaborator, our laboratory is also conducting experiments to study the effect of HBX on MHC class I assembly and antigen presentation. Finally, experiments are under way to target the HBX-proteasome interaction as a novel antiviral approach.